Correlation Between FLOW TRADERS and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and InPlay Oil at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FLOW TRADERS and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and InPlay Oil Corp, you can compare the effects of market volatilities on FLOW TRADERS and InPlay Oil and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FLOW TRADERS with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and InPlay Oil.
Diversification Opportunities for FLOW TRADERS and InPlay Oil
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FLOW and InPlay is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and FLOW TRADERS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FLOW TRADERS LTD are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and InPlay Oil go up and down completely randomly.
Pair Corralation between FLOW TRADERS and InPlay Oil
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.96 times more return on investment than InPlay Oil. However, FLOW TRADERS LTD is 1.04 times less risky than InPlay Oil. It trades about 0.01 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.02 per unit of risk. If you would invest 2,257 in FLOW TRADERS LTD on November 7, 2024 and sell it today you would earn a total of 105.00 from holding FLOW TRADERS LTD or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. InPlay Oil Corp
Performance |
| Timeline |
| FLOW TRADERS LTD |
| InPlay Oil Corp |
FLOW TRADERS and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and InPlay Oil
The main advantage of trading using opposite FLOW TRADERS and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, InPlay Oil can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in InPlay Oil will offset losses from the drop in InPlay Oil's long position.| FLOW TRADERS vs. UNIVERSAL MUSIC GROUP | FLOW TRADERS vs. Strategic Education | FLOW TRADERS vs. The Trade Desk | FLOW TRADERS vs. Xinhua Winshare Publishing |
| InPlay Oil vs. CITIC Telecom International | InPlay Oil vs. TROPHY GAMES DEV | InPlay Oil vs. Boyd Gaming | InPlay Oil vs. COMBA TELECOM SYST |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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